Even as the National Stock Exchange (NSE) is battling it out with the Singapore bourse over the latter launching Nifty-based derivative products, it has joined hands with another foreign exchange to share tech know-how.
The NSE has signed an agreement with U.S.-based Nasdaq that will allow it to leverage the latter’s post-trade technology for functions such as real-time clearing, risk management, and settlement. At a joint address with Nasdaq on Monday, NSE’s MD and CEO Vikram Limaye said Nasdaq’s technology will be customised to suit the needs of the Indian market and that the implementation process will take around 24 to 36 months to be completed.
“All our systems [being used currently] have been developed in-house. They’ve been in place for a long time… We’ve decided to upgrade the system as we need to be future-ready,” Limaye said, adding that the upgrade will also allow NSE to incorporate blockchain-based tech and evolve in line with regulatory evolution.
Apart from the agreement to use Nasdaq’s post-trade technology, the exchanges also signed another agreement allowing the American bourse to work with NSE’s tech subsidiary NSEIT, and develop solutions and products that can be implemented on a global level. Both bourses also signed an MoU to explore business opportunities across listings, corporate and market services, and product innovations.
Adena Freidman, president and CEO of Nasdaq, said the move will also allow both exchanges to explore opportunities in the listing space, with the possibility of offering a dual listing to companies after obtaining the necessary green signal from the regulators. She added that the tie-up with Nasdaq extends the bourse’s footing into the South Asian market.
Nasdaq maintained that there was no exclusivity clause in the agreement, which means the bourse is free to share technology with other Indian exchanges as well.
NSE and Nasdaq refused to comment on the financial contours of the agreement with respect to Nasdaq receiving a payment from NSE or picking up a stake in NSE, given that an IPO for the Indian exchange is imminent
The new post-trade technology will replace NSE’s current system, which is operated by National Securities Clearing Corporation Limited (NSCCL), a wholly-owned subsidiary of NSE.
Limaye appeared confident that the move will help increase NSE’s efficiency and allow NSCCL to stay nimble in an evolving ecosystem. “We need to figure out a way to get foreign companies with a sizable business in India to list here and expand the market,” he said.
